President Obama has driven spending and deficits to historic levels in just two years since taking office. Not content to stop there, his budget for the next 10 years keeps spending at record levels and piles up unprecedented amounts of debt in the process. To partially offset his massive overspending, the President wants to raise taxes on “the rich.” His class warfare plan can take him only so far, however, since the rich don’t earn enough to make up the difference for all the spending he plans. Obama’s current tax …
As Members of Congress limp out of Washington to face their constituents, it’s worth reviewing their accomplishments—or lack thereof. The most basic function of Congress is to manage the public purse. The most basic step in managing finances—whether of a family, a business, a state, or a nation—is to pass a budget identifying expected revenues and intended outlays. As per his responsibility, the President laid out his budget in great detail in January. For the first time in modern memory, the House of Representatives did not even attempt to pass …
In the 1980s and 1990s, Chicken Littles warned that Japan was buying up America. The biggest symbol that our country couldn’t keep up with Japan’s managed-trade policies was the 1989 purchase of New York’s Rockefeller Center by Mitsubishi. Even though the sky didn’t fall, protectionist Chicken Littles are at it again. Only today it’s China that Americans are supposed to fear. According to one writer, Getting tough with China is not protectionist, it’s self defense. Don’t stand up and Beijing will end up owning the National Mall along with the …
A new messaging strategy, based on public polling results from top Democratic pollsters, suggests that congressional lawmakers should wave the white flag when discussing Obamacare in their election campaigns. The PowerPoint presentation, released in a conference call organized by Families USA, encouraged officials to “keep claims small and credible: don’t overpromise or ‘spin’ what the law delivers.” In other words, abandon ship on claims that lawmakers made for months during the health reform debate—that the legislation would in any way reduce the nation’s deficit or lower health care costs (in …
Now that the congressional money tree has bloomed again, this time in the form of new stimulus money for the states, we are faced with the question of whether the federal government will ever learn self-control. Federal government spending has exploded over the last two years, causing unsustainable debt that is being compounded by pressing entitlements. In fact, in January 2009, total public debt outstanding was $10.6 trillion. Today it surpasses $13.2 trillion—despite the cries of the American public for the federal government to control its spending spree. The worry …
When economists forecast the economy, they tend to draw straight lines. They figure out where we are and where we’re going, and they plot a line. In fact, neither contractions nor expansions are ever smooth. For various anomalous reasons in the economy and in the data, reported GDP movements are jagged. The reported economy accelerates, slows down, jumps, and pauses. So one ought to hesitate before reading too much into the latest economic data. However … The recent report on second quarter growth showing a reasonably strong 2.4 percent pace …
Progress is often a matter of higher, faster, further—profits are higher, computer chips are faster, cars run further on a gallon of gas. In Washington, progress is often measured by more and more—spending more than ever and being more cynical than ever. The liberal leadership in Congress has set a new standard for progress. Not content with having pushed the budget deficit over $1.4 trillion with an Olympic-sized spending spree, the House of Representatives will rush back from its August recess next week to vote on another bailout package, this …
Almost as soon as the 2010 Social Security trustees report comes out today, various groups will claim that the program is fiscally healthy because its trust fund won’t run out until sometime in the 2030s. Sadly, the reality is very different. The trust fund contains promises to pay—not real money. Those promises are in the form of special issue U.S. Treasury bonds, so they have legal standing, but there is no Scrooge McDuck-like vault filled with cash. Instead, as Bill Clinton’s OMB noted back in 2000:
It’s difficult to forget the drama—including riots, fires, and even deaths—that unfolded during Greece’s recent fiscal crisis. But what would happen if bad budget policy led to a financial crisis in the United States? A recent report from the Congressional Budget Office (CBO) points out the economic casualties of a fiscal crisis in the US would be devastating. First, fiscal crises trigger significant spikes in interest rates, which devastated business investment and consumer spending alike.
Liberals are desperate to bully or chide the rest of the country into accepting massive new taxes to support the recent federal spending surge. Many opponents who resisted the spending on the grounds that it increased the budget deficit are now being called deficit chickens because they oppose the tax hikes needed to pay for all that spending. This is a particularly nauseating development as the charge comes from those whose actions prove they care not one whit about the nation’s finances. Nauseating or not, however, there is no reason …
